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The biggest FRAUD in US history. $FNMA $FMCC @realDonaldTrump @SecScottBessent @howardlutnick @BillAckman
During the 2008 financial crisis, Fannie Mae and Freddie Mac (government-sponsored enterprises, or GSEs) were placed into conservatorship by the FHFA. The U.S. Treasury provided massive financial support through Senior Preferred Stock Purchase Agreements (PSPAs), initially entitling Treasury to a fixed 10% dividend on its senior preferred shares plus warrants for up to 79.9% of common stock.
In August 2012, the FHFA (as conservator) and Treasury amended the PSPAs via the Third Amendment. This replaced the fixed dividend with the Net Worth Sweep: Fannie and Freddie must pay Treasury quarterly dividends equal to nearly their entire net worth (minus a small capital buffer), sweeping all profits to the government. This has funneled over $150 billion in excess dividends to Treasury beyond the original terms, while preventing private shareholders from receiving dividends or benefiting from profits, even as the companies became highly profitable. The GSEs remain in conservatorship (intended as temporary) over 15+ years later.
• A jury trial occurred in July-August 2023.
• On August 14, 2023, after deliberations (reports vary from 8-10 hours), the jury reached a unanimous verdict (described as 8-0 or fully unanimous in sources) in favor of the shareholders.
• The jury found that the FHFA, by agreeing to the Net Worth Sweep in 2012, breached the implied covenant of good faith and fair dealing inherent in the shareholder contracts (e.g., stock certificates).
• This breach occurred because the FHFA acted “arbitrarily or unreasonably,” frustrating shareholders’ reasonable expectations and harming them by diverting profits away from private investors.
• The jury awarded $612.4 million in damages ($299 million+ for Fannie preferred, $281 million+ for Freddie preferred, and $31 million for Freddie common).
This was a landmark win for shareholders—the first major jury verdict against the government in these long-running Net Worth Sweep disputes.
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